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In fact, checking accounts hold more money than ever, according to Federal Reserve data going
back 50 years. The current amount: nearly $900 billion.

Why so much?

Rock-bottom interest rates get much of the blame.

Ask any saver these days, and he’l l tell you how low rates are on a certificate of deposit, a
result of Federal Reserve policies meant to push down borrowing costs and boost a still-weak
economy.

Rates on a one-year CD at many banks are running around 0.25 percent. They had been as high as 3
percent just a few years ago. Longer-term CDs paid even more.

Kathy Alward, the customer-service representative at tiny Pataskala Banking Co. in Licking
County, sees customers’ sad looks when she tells them what the new rate is on a CD, especially
older customers who depend on interest income.

“The rates are not high enough,” said Brian Moore, the bank’s vice president. “So they’re
leaving it in checking and savings accounts and waiting for the rates to rise.”

Financial planner Robert Reed of Reed Financial Planning in Clintonville says it’s not just
that.

“Money is piling up because they’re afraid to do anything with it or don’t know what to do with
it,” he said.

One reason that savers might not be turning elsewhere is that alternatives don’t hold much
appeal.

Many investors, for the most part, have been staying away from the stock market, even though it
is at record levels and has more than doubled in the past four years. These are the same people,
after all, who watched the market crash in 2000, when the dot.com bubble burst, and again in 2008,
during the financial crisis and recession.

“They don’t want to get burned a third time,” said Claes Bell, senior banking analyst for
Bankrate.com, who wrote about the $900 billion figure last month.

Yet many people don’t want to seek out professional help to guide them, either.

A recent survey by PNC Bank found that while 84 percent of people plan to see their dentist this
year for cleanings, and 70 percent say they will get more exercise regularly, only 43 percent say
they will meet with a financial adviser.

With the economy still tepid and the Fed promising to keep rates low for the foreseeable future,
keeping money stashed in a checking account in the hope that interest rates will rise soon is not a
winning proposition either, experts say.

“The clock is always ticking with money,” Bell said.

But options exist that can boost returns at least a bit.

Take Richard Reiff, 65, of Upper Arlington. He’s like many retirees in that he wants to make
sure he keeps his money safe. “At this point, I don’t want to be taking risk with my money,” he
said.

But Reiff has found he can bolster the interest rate he gets by shopping around at several banks
and credit unions. “The big banks don’t offer the rates that the small banks do,” he said.

Bankrate.com’s website, for example, shows several banks with rates of 1 percent or higher on a
one-year CD — not great, but better than the national average, Bell said.

Also, some banks offer high-yield checking accounts that can provide more return, he said.

Longer-term CDs offer higher rates but can be risky as well if rates rise and that money is tied
up.

One idea is to search for a long-term CD that imposes a small penalty for early withdrawal.
Another idea is to do what Reiff does, staggering CDs’ maturity dates so his portfolio has a mix of
rates and he can take advantage if rates rise.

Short-term bond mutual funds also might be an option. Another might be bonds that the federal
government sells that are tied to the rate of inflation.

But for better returns, savers need to consider stocks.

Anne Smith, a senior editor with
Kiplinger’s Personal Finance, said savers should have at least some money in the stock
market as part of a diversified portfolio. “It’s crazy to be out of the stock market,” she
said.

Despite the market’s run to record highs, “people still hate stocks,” she said.

Steep declines in the market over time aren’t the only things that give investors pause. They
also watched as the stock market plummeted 600 points in a few minutes during the “flash crash” in
2010 before quickly recovering.

“It’s such a nick in people’s confidence in the whole system,” Smith said. “I think it keeps
people out.”

But investors have ways to minimize risk, she said.

Those looking for income can focus on stock funds known for paying dividends. Other funds can
reduce volatility, she said.

For clients frightened about going back into the market, financial planner Reed said, money
could be sent into the market a bit each month to make them feel more comfortable.

“I know it’s scary, so let’s start a little bit at a time,” he said.

Reed said he favors low-cost index funds, such as the one that mimics the Standard & Poor’s
index of the biggest 500 companies in the U.S. Funds that focus on international stocks and small
companies can fill out a portfolio, he said.

“People want the growth without the risk, and it’s just not there,” he said.